Following a contentious final month of campaigning, Mayor Mufi Hannemann was re-elected by Honolulu voters last night, handily defeating City Council member Ann H. Kobayashi.

The race turned out to be harder than many expected back in January, when Hannemann was an incumbent with a large campaign war chest and no apparent challenger. He was pushed to a run-off election by Kobayashi and University of Hawaii engineering professor Panos D. Prevedouros in the primary election. But Hannemann surged to a large lead early last night before coasting to victory.

"There are many daunting challenges our city faces. Let's do what's best for the people of Hawai'i," he said to supporters gathered at the Dole Cannery ballroom. "I have the greatest group of friends and supporters in the world. You folks have been here a long time and have been with me through thick and thin and I love you and will continue to work very hard for you. I thank you for sending us back to City Hall."

The victory allows Hannemann to keep his job and to oversee the initiation of the city's proposed $4.28 billion rail transit system, which also won approval from voters last night. He returns to office at a time when the economy is faltering and property values are plummeting, forcing the city to prioritize capital projects while ensuring that city services are operating efficiently.

The victory also raised questions about Hannemann's political future.

During the campaign Hannemann maintained that he would like the opportunity to consider a possible run for governor or the U.S. Congress in 2010.

"Here's a success story: Born in Samoa, mayor of Honolulu," said U.S. Sen. Daniel Inouye, speaking to Hannemann's supporters. "And this is just the beginning. He may go to Washington, he may go to Washington Place."

Hannemann lauded the presidential victory of U.S. Sen. Barack Obama as representative of Hawai'i's voice to the nation.

"In Barack Obama we have someone who grew up just like me and you, saimin, malassada, manapua, teriyaki steak, teriyaki chicken, shave ice, shorts, T-shirt, rubbah slippahs, knows the difference between the North Shore and Hanauma Bay, doesn't need a road map to go from Kalihi to Wai'anae to Kahala," Hannemann said. "And that's what we have in the White House, someone who knows Hawai'i, feels Hawai'i and believes in Hawai'i."

Hannemann spent Election Day driving from neighborhood to neighborhood waving signs and greeting supporters before showing up at Dole Cannery to greet a crowd of more than 400 supporters.

"I want to extend a hand out to all those who voted for Ann," said Hannemann. "If we can come together, good things can happen."

Support for the mayor was reflective of the non-stop campaigning, said Bill Brennan, the mayor's press secretary. "It's the voters' recognition of the administration's accomplishments over the last four years and people want to return him to office."

"More often than not we've agreed on the issues facing our city and I look forward to working with him again," City Council member Nestor Garcia said.

Hannemann campaigned on a "record of achievement," touting his administration's efforts to repair sewers and roads while bolstering public safety and core city services. He promised to get the economy moving by spending on infrastructure creation and improvement. He backed the rail transit plan as a means to stimulate the economy as well as easing traffic congestion.

Before the polls closed, Kobayashi boarded a trolley and drove around O'ahu with her daughter and son, stopping to meet with supporters and wave signs.

Kobayashi had said she would bring openness and transparency to Honolulu Hale while preaching fiscal prudence. She vowed to lower taxes and city fees and ensure that government was only collecting what it needed to efficiently run the city.

More than 350 supporters gathered at the Japanese Cultural Center last night to watch the results come in.

Kobayashi conceded the race shortly before 10 p.m., saying she had called Hannemann to congratulate him.

"Thank you from the bottom of my heart. Thank you. We made a difference in Hawai'i, we got our word out," said Kobayashi, speaking to supporters. "That's our goal — to keep our city a great place to live."

Voters across O'ahu were drawn to the polls by the race for the White House and the rail question in addition to the mayoral competition.

Jackie Tovey brought her daughters Char, 10, and Carrie, 6, to Farrington High School, hoping that booths for kids would be open, but learned that kids were only able to experience voting online this year.

Tovey said she's "real happy" with Hannemann's leadership. "I've e-mailed him with problems before and I've gotten responses quick and I've seen them work on correcting problems," she said. "I'm very happy with Mufi as mayor."